This proposal examines the impact of school grade retention on majority and minority children using a contextual-developmental approach. An interlocking, multi-method program of research will examine the origins and maintenance of problems associated with school grade retention with special attention to two minorities (Mexican American & African American) and majority children and adolescents, and links to adjustment. A bilingual, prospective longitudinal methodology is used to identify factors associated with grade retention and subsequent school adjustment, defined in terms of both academic achievement and individual behavioral adjustment. The first phase of the research (Module 1) focuses on descriptive associations between demographic variables and grade retention. Module 2 uses information from Module 1 to examine cross-sectional moderating processes, and explore how child, peer, family and school variables influence the relation between retention and adjustment. Sex and minority status will receive special attention as potential moderators of all processes. Retention may influence child adjustment through individual self-system processes (e.g., self-esteem, personality differences), but child, family, and school variables may moderate further the process. Control beliefs, engagement in school activities, feelings of school relatedness, and family support may buffer children from adverse effects of grade retention Module 3 uses information from Modules 1 & 2 to track processes longitudinally, from first grade through fifth grade. Longitudinal information will allow examination of processes associated with stability and predictive validity during periods of life transition It is possible that the effects of grade retention can be partitioned into temporary, situational effects due to changes in classroom cohorts, longer term effects due to self-system accommodations, and still Longer term developmental effects due to peer relations complications associated with emerging puberty. Longitudinal analysis will also allow for prospective comparisons L with appropriate age, sex, minority /majority and ability controls. Module 4 uses child, family, and school information from the three previous modules to construct and test structural models that examine possible pathways between grade retention in first grade and adjustment and achievement five years later. The four modules build basic empirical bridges between school policy for grade retention and an understanding of individual, developmental, and school processes that moderate the success of the school policy. It should be possible to identify (a) children for whom grade retention is especially disruptive; and (b) process that buffer or aggravate such disruption.